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Refinancing your student loans is the process of paying off your old loans with a new one — leaving you with just one loan and payment to manage. Through refinancing, you might be able to lower your interest rate or reduce your monthly payment.
While the process is typically free to complete, there can be other costs to refinance student loans. Depending on your situation, you could end up paying more in total interest or lose access to special protections. Learn about the potential costs of refinancing student loans, and whether you could benefit from it.
- How much does it cost to refinance student loans?
- Indirect costs of refinancing
- Can refinancing student loans save me money?
How much does it cost to refinance student loans?
There are often no upfront costs to refinance student loans — you usually won’t pay an application fee, origination fee, or any other expenses when you get your new loan.
In fact, student loan refinancing could save you significant money, depending on your situation. If you owe $25,000 at an 8.00% interest rate over 10 years, for example, refinancing to a 5.00% rate could reduce your costs by more than $4,500.
Student loan refinancing fees
While refinancing is often free, some lenders may charge you the following:
- Application fee: This is a fee you pay when you submit an application to borrow. Most lenders don’t charge you to apply, so it should be easy to avoid this cost.
- Origination fee: This might be charged when the lender opens your loan account. While federal student loans carry origination fees, they’re rare in student loan refinancing.
- Late fee or returned payment fee: While you can likely avoid application and origination fees, most lenders will charge you for paying late or submitting a payment that can’t be processed. However, a handful of companies, such as SoFi, don’t charge late fees.
- Prepayment fees: In some types of lending, you could be charged a fee if you pay off your loan early. However, prepayment penalties aren’t permitted in student lending, so you won’t have to worry about this when you refinance student loans.
| Lender | Variable rates from (APR) | Fixed rates from (APR) |
|---|---|---|
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.33%+ | 4.9%+ |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.29%+1 | 7.0%+1 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.99%+2 | 6.99%+2 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.05%+5 | 6.0%+5 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.28%+3 | 5.48%+3 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.4%+4 | 5.9%+4 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.52%+ | 5.24%+ |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| N/A | 6.2%+ |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.12%+ - 11.19%+8 | 7.610%+ - 14.510%+8 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| N/A | 5.79%+ |
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| Compare personalized rates from multiple lenders without affecting your credit score. 100% free! |
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All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures | 8Nelnet Bank Disclosures |
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Indirect costs of refinancing
Although you typically won’t pay anything upfront to refinance student loans, there can be other costs of refinancing. Here’s what to consider.
You could pay more interest over time
Depending on your circumstances, refinancing could add to your interest costs.
If you lower your interest rate but take longer to repay your loan, for example, you’ll pay interest for more years than you otherwise would have. Because of this, your total borrowing costs could go up even if your new loan has a lower rate.
Say you owe $20,000 with a 6.80% interest rate. You make monthly payments of $300 and you have seven years remaining on your loan. If you refinanced to a 15-year loan at 4.25%, your monthly payments would drop to $150 but you’d increase the lifetime costs of borrowing by about $1,900 — and would be in debt for eight extra years.
You give up federal student loan benefits
Before you refinance, consider the types of loans you currently have. Generally, refinancing private student loans carries less risk than refinancing federal debt.
If you refinance federal loans, you’ll lose access to important borrower benefits such as forgiveness opportunities, income-driven payment plans, and more flexible deferment and forbearance options. You would also be ineligible for any special federal protections, such as the COVID-19 student loan payment pause.
Losing these borrower benefits could come at a huge cost if you later lose your job, become disabled, or could have qualified for forgiveness. If you’re thinking about refinancing federal loans, make sure you won’t need these benefits before you move forward.
Your credit score could be impacted
When you apply for a refinanced loan, the lender will conduct a hard credit check. These inquiries remain on your record for two years, and too many can hurt your credit score.
Your new loan can also make your average age of credit appear shorter. Generally, a longer average age of credit is preferable to a shorter one, and your credit score could be adversely impacted as a result.
The decline in your credit score resulting from a new inquiry and a shorter average age of credit should be temporary, but be sure to time it right. If you’re also hoping to get a new mortgage or car loan soon, for example, a recent credit dip could affect your terms on those new loans.
You may require a cosigner
If you can’t qualify to refinance student loans on your own, you may need a cosigner. This is someone with good to excellent credit — often a parent or other family member — who agrees to share responsibility for your loan.
Asking someone to cosign your loan doesn’t come at a direct financial cost, but it could strain your relationship if your family refuses or you miss a payment and damage your cosigner’s credit.
Your debt will also appear on your cosigner’s credit record, which will affect their debt-to-income ratio and could impact their own borrowing abilities. They could face higher rates or even be denied for a loan if they cosign your debt.
Can refinancing student loans save me money?
While there can undoubtedly be a cost to refinance student loans, many people still find they can improve their financial situation by refinancing.
Refinancing can reduce your monthly payment by extending your payment timeline or reducing your interest rate. This can provide financial breathing room for you if you’re struggling.
Refinancing could also potentially help you to qualify for discounts if your new lender offers more savings than your current one does. For example, you might benefit from a loyalty program or better autopay discounts that save you more money than your current lender does.
Since refinancing can impact both your monthly payments and total costs over time, use a student loan refinancing calculator to estimate your costs. Input the details about your current debt and proposed future loan to see if refinancing is the right move for you.
| Lender | Fixed rates from (APR) | Variable rates from (APR) | Loan terms (years) | Loan amounts | Min. credit score |
|---|---|---|---|---|---|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 4.9%+ | 5.33%+ | 5, 7, 10, 15, 20 | $10,000 up to $250,000 (depending on degree) | 720 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.0%+1 | 7.29%+1 | 5, 7, 10, 15, 20 | $10,000 to $500,000 (depending on degree and loan type) | Does not disclose |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.99%+2 | 6.99%+2 | 5, 7, 10, 12, 15, 20 | $5,000 to $300,000 (depending on degree type) | Does not disclose |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.0%+5 | 8.05%+5 | 5, 10, 15, 20 | $1,000 to $250,000 | 700 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.48%+3 | 5.28%+3 | 5, 7, 10, 12, 15, 20 | $10,000 to $250,000 | 680 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.9%+4 | 8.4%+4 | 5, 10, 15, 20 | $5,000 to $250,000 | 670 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.94%+ 7 | N/A | 5, 7, 10, 12, 15, 20 | Up to $300,000 | 670 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.2%+ | N/A | 7, 10, 15 | $10,000 up to the total amount of qualified education debt | 670 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.79%+ | N/A | 5, 10, 15 | $7,500 up to $250,000 (depending on highest degree earned) | 680 |
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| Compare personalized rates from multiple lenders without affecting your credit score. 100% free! |
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All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures | 8Nelnet Bank Disclosures |
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Taylor Medine has contributed to the reporting of this article.